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Salary tax in FY 2083/84, explained
The new income tax slabs for this fiscal year, who pays the 1% band, the main deductions, and a worked example.
Finance Act 2083 changed the income tax slabs for individuals. From FY 2083/84 (which began on 1 Shrawan 2083, 17 July 2026), single and couple filers use the same schedule.
The slabs
| Taxable income | Rate |
|---|---|
| Up to Rs 10,00,000 | 1% (social security tax) |
| Rs 10 lakh to 15 lakh | 10% |
| Rs 15 lakh to 25 lakh | 20% |
| Rs 25 lakh to 40 lakh | 27% |
| Above Rs 40 lakh | 29% (27% plus a 2% additional rate) |
Who does not pay the 1% band
The 1% on the first Rs 10 lakh is waived for people who contribute to the contribution-based Social Security Fund or an approved pension fund, for pension income, and for registered sole proprietorships.
The main deductions
- Retirement contributions: up to Rs 5 lakh or one third of your income, whichever is less.
- Life insurance premium: up to Rs 40,000. Health insurance: up to Rs 20,000. Insurance on your own building: up to Rs 10,000.
- Children’s school fees: 25% of the fees, up to Rs 25,000.
- Remote-area allowance: Rs 10,000 to Rs 50,000, by area class.
Two credits come off the tax itself: 10% for a woman whose only income is employment income, and 15% of approved medical bills, up to Rs 750.
A worked example
IRD’s own example: on taxable income of Rs 60 lakh, the tax is Rs 12,45,000:
| Band | Amount | Tax |
|---|---|---|
| First Rs 10 lakh at 1% | 10,00,000 | 10,000 |
| Next Rs 5 lakh at 10% | 5,00,000 | 50,000 |
| Next Rs 10 lakh at 20% | 10,00,000 | 2,00,000 |
| Next Rs 15 lakh at 27% | 15,00,000 | 4,05,000 |
| Remaining Rs 20 lakh at 29% | 20,00,000 | 5,80,000 |
| Total | 60,00,000 | 12,45,000 |
Work out your own with the free salary tax calculator. It is an estimate for planning: the tax your employer deducts, or IRD assesses, is the one that counts.